Make Washington's richest pay

Ethan Boyles makes the case in favor of a ballot initiative in Washington state that would impose an income tax on the richest 1.2 percent of residents.
A RED specter is haunting Washington state these days.
No, the Evergreen State isn't on the verge of a working-class uprising, although such a specter would be a sight for sore eyes. Instead, this red specter, which is haunting states across the country, comes in the form of massive budget deficits, coloring state balance sheets in red.
Fueled on the one hand by the worst economic crisis since the Great Depression, and on the other by massive tax breaks for the wealthy over the last several decades, rising budget deficits are leaving in their wake nothing but apparitions of the services once funded.
Members of the International Socialist Organization at the University of Washington are working with other organizations and concerned students to ensure I-1098 passes.
Come to a meeting to organize around this issue at the University of Washington's Seattle campus at 12 p.m. Contact isouw@uw.edu for the building and room number. All are welcome.
In Washington state specifically, $3.4 billion has already been cut from the state budget for the 2009-2011 biennium in an attempt to keep the red menace at bay. Updated projections estimate Washington is facing an additional $2.6 billion deficit. Another $3 billion deficit is expected for the 2011-13 budget cycle.
Public services, including education and health care, have thus far been the primary victims. Tuition has increased up to 30 percent in the last two years, while funds to reduce class sizes have been cut by 70 percent. Over 40,000 Washingtonians have lost state-supplemented health care coverage. State funding for child vaccinations has been eliminated. More than 2,600 public sector employees were laid off between 2007 and 2009.
But cuts to public funding aren't the only way to stop the red specter. I-1098, an initiative on Washington's ballot this year, presents a different solution: tax the rich. I-1098 would institute an income tax to be paid by individuals with annual incomes over $200,000, or couples with incomes over $400,000. This amounts to a tax on only the wealthiest 1.2 percent of Washington's residents.
In addition, I-1098 would reduce the state property tax by 20 percent and eliminate the business and occupation tax for small businesses. In its entirety, I-1098 is estimated to raise $2 billion per year, revenue that is explicitly earmarked to fund public education and health care.
- - - - - - - - - - - - - - - -
WASHINGTON IS one of seven states in the country that lacks any kind of income tax. To pay for public services, a majority of the state's general fund revenues comes from sales tax.
Such over-reliance on the sales tax hurts working Washingtonians in a couple ways. For one, whenever the economy takes a dip, and consumer spending falls with it, state revenue dries up quickly and the red specter rears its ugly head. And secondly, the current tax structure in Washington is the most regressive tax system of any state in the country.
Dependency on the sales tax means the poorest Washingtonians, those making an average of $11,00 a year, pay 17.3 percent of their income in state taxes. Compare this to the richest, who make an average of $1.8 million a year and only pay 2.6 percent in state taxes. As Eli Sanders, a reporter for Seattle's Stranger, writes, "It's like a sliding scale that's sliding in the wrong direction. Or trickle-up economics. Or a subsidy for moguls and CEOs."
And Washington has more than its fair share of moguls and CEOs, who, despite the economic recession, are doing pretty darn well. Forbes magazine recently released its list of the top 400 richest people in America. As it turns out, four of the top 20 richest Americans live in Washington state, including America's richest person, Bill Gates.
The combined wealth of just these four individuals, $92.4 billion dollars, could not only cover Washington's state budget deficit with ease, but could in fact pay for all of the state's 2006 pre-recession expenditures three times over! The billions more they make in income every year could go a long way in fending off Washington's ghastly deficit.
But the truth is, even with the passage of I-1098, the vast majority of income of the richest people in the state would flow untouched into their personal coffers. This is true because the initiative would only tax individual income above the $200,000 threshold (or above $400,000 for couples). And even then, individual income between $200,000 and $500,000 ($400,000 and $1 million for couples) would only be taxed at a 5 percent rate, while a 9 percent rate applies to individual income in excess of $500,00 ($1 million for couples).
By national standards, this is an extremely low income tax. Suppose we have an individual who makes $350,000 a year. Washington, under I-1098, would tax this person less than any other state that has an income tax.
Despite the relatively weak taxation structure proposed by I-1098, those in favor of economic justice and fairness should be in full support of the initiative. Not only will the $2 billion in annual revenue generated by I-1098 help protect public education and health care, but the grassroots nature of the campaign will build the organizations and confidence of Washingtonians to fight for more down the road.
As with Measures 66 and 67, which were passed in Oregon earlier this year and which increased taxes on the richest Oregonians, a winning campaign in Washington will demonstrate to a country drowning in the venom of right-wing tirades that progressive politics can win the day, so long we take a principled stance in favor of them. As Oregon socialists Tim Koch and Adam Sanchez wrote, "The passage of [Measures 66 and 67] in supposedly anti-tax Oregon should make it apparent that people are sick of budget cuts, and are ready to make the rich pay their fair share."
I-098 should be seen as a stepping-stone to replace the red specter of the budget deficit with the red specter of mass working-class organization and fight-back. The money already exists to fully fund the vital public services that millions of Washingtonians depend on. The task now is moving that wealth from the hands of those who neither need it nor are willing to spend it in the current economic climate, to the hands of those hardest hit by both the economic recession and Washington's current regressive tax structure.
As Sanders points out, Washington's budget deficit is leading to cuts that "will land hardest on those who already pay the highest percentage of their income in taxes." We need to take on this red specter before the last of our public services disappear.